Manila, Philippines – July 8, 2025 — The Ibon Foundation, a well-known economic think-tank, has expressed skepticism over the Marcos administration’s target of reducing the national budget deficit to 3.8% by the end of the president’s term in 2028.
According to Ibon Foundation Executive Director Sonny Africa, achieving this goal will be difficult due to the government’s current fiscal direction. Africa pointed out that while funding for basic services continues to shrink, tax policies appear to favor the wealthy. At the same time, the administration is distributing billions of pesos in aid, which he says adds pressure to public spending.
Africa emphasized that as long as this policy focus continues—reduced revenue collection from high-income sectors alongside massive cash disbursements—the government is likely to spend more than it earns. This imbalance, he warned, may widen the deficit even further.
He also noted that the country’s ongoing dependence on borrowing is a red flag, as the government continues to take on more debt to cover its financial obligations.
The Marcos administration has previously set a goal of narrowing the deficit to 3.8% of GDP by the end of its term. A budget deficit occurs when government expenditures exceed revenue collections over a specific period.
With current fiscal trends, Ibon Foundation believes that reaching this target may be overly optimistic without a major shift in government priorities and policies.
